THE ECONOMIC IMPACT OF WORKPLACE ACCIDENTS
Analyzing the economic implications when an employee leaves the company. Is prevention worth it from a financial standpoint?
In the previous article, we discussed the impact of workplace accidents in Spain, examining the figures and statistics provided by the government.
But what are the economic implications of an employee’s sick leave for a company?
I will, of course, rely on estimates, since this depends on numerous factors and it is not possible to give an exact figure.
The cost to a company of a single employee’s sick leave depends entirely on the severity of the accident and the length of time the employee is on leave.
Macroeconomic estimates based on reports from the National Institute for Occupational Safety and Health (INSST) and a 2011 study by Mutua Universal put the overall average cost of a workplace accident resulting in sick leave in Spain at around €24,500. However, this average is “inflated” because it lumps together minor accidents with very serious or fatal ones. Nevertheless, if we adjust that historical cost to today’s market—taking into account the cumulative increases in contribution bases and the Minimum Wage (SMI)—the actual economic impact now exceeds €28,000 per accident.
Next, we'll analyze several points.
- HYPOTHETICAL CASE: A SUPERMARKET
For a stocker, cashier, or fresh food handler in a store in Spain, the average salary is around 17,400 € gross per year (about 1,450 € gross per month, including prorated bonuses). This figure is based on statistics from several job websites.
Under the sector’s collective bargaining agreement (such as those for large retail chains or the food retail sector), when a work-related accident (AT) occurs, the company incurs a very high direct cost because:
- It continues to pay the employer’s share of Social Security contributions (approximately 32% of gross salary) even while the employee is on sick leave.
- The agreement requires the company to pay a temporary disability supplement to cover 100% of the worker’s salary (the workers’ compensation insurance only covers 75%).
- Indirect costs (replacing the worker, training time, loss of productivity).
Scenario A: Cost per Musculoskeletal Strain (Moderate Absence)
The average recovery time for sick leave due to lower back pain, a herniated disc, or tendinitis caused by overexertion is usually 45 days, depending on the severity of the condition.
- Social Security costs paid by the company (45 days): approx. 700 €
- 100% collective bargaining agreement supplement (25% of salary): approx. €540
- Indirect costs (hiring a temporary replacement through a staffing agency, time spent on paperwork, reduced productivity of the replacement): approx. €2,500
- Estimated total cost of a work-related sick leave: approx. €3,740
We have a real-life case from the National Institute for Occupational Safety and Health illustrating the actual cost incurred by a company that failed to invest in prevention, resulting in an employee sustaining an injury (which ultimately led to permanent disability) due to repetitive movements of the upper limb. This case could very well involve constant cutting with a knife.
Implementing corrective measures and ergonomic technical solutions—such as the semi-automation of workstations—would have cost that same company €21,600. By failing to do so, they lost €198,946. This case demonstrates that prevention using specialized technology is not a cost; it is the most cost-effective financial safeguard for a supermarket.
Scenario B: Cost per Cut with Knife/Machine (Slightly Lower)
A deep cut that requires stitches or slightly affects the mobility of a finger usually results in an average of 15 days of sick leave.
- Social Security costs paid by the company (15 days): approx. 230 €
- 100% collective bargaining agreement supplement (25% of salary): approx. €180
- Indirect costs (shutting down the section for cleaning, reorganizing emergency shifts, lower sales at the counter): approx. €1,200
- Estimated total cost of a sudden absence: approx. €1,610
- COMPARISON TABLE WITH HALFRESH
Having analyzed these two scenarios, we will create a comparative table of costs based on the solutions we offer at Halfresh.
Let’s imagine a medium-sized supermarket or a small chain that, on average, experiences 4 absences per year due to overexertion (common among stockers and cashiers) and 3 absences due to cuts (common in the fresh produce section).
|
Concept of Accident Rate |
|
With Halfresh (Risk reduced by 80%) |
Annual Savings for the Company |
|
Absences Due to Musculoskeletal Strain (4 absences per year × €3,740) |
14.960 € |
2.992 € |
11.968 € |
|
Absences Due to Cuts (Knife) (3 absences per year × €1,610) |
4.830 € |
966 € |
3.864 € |
|
Risk of Penalty / Inspection Surcharge (If a serious accident occurs despite preventive measures) |
High probability (€15,000 to €50,000) |
None or low (They demonstrate proactivity and protection) |
Beyond its monetary value, it provides legal peace of mind. |
|
TOTAL ANNUAL ECONOMIC COST |
19.790 € |
3.958 € |
€15,832 in net savings |
How much does a slicing machine cost at Halfresh?
The price of our slicing machines ranges from €414.81 to €5,999.75, from the simplest to the most complex.
- FINANCIAL ANALYSIS BY MACHINE TYPE
Based on the net annual savings of €15,832, we calculate the monthly financial benefit, which amounts to savings of €1,319.33 per month.
Scenario A: Investment in the simplest machine (€414.81)
If the customer opts for the basic entry-level solution:
- Amortization period:
- Conclusion: The machine pays for itself in just 9 days of operation. Starting in the second week, all savings go directly toward the supermarket's net profit.
F450: https://www.halfreshtech.com/eng/fruit-vegetable-cutting-machines-f450.html
Scenario B: Investment in the most complex machine (€5,999.75)
If the customer purchases the most expensive industrial or high-end equipment:
- Amortisation period:
-
Conclusion: The investment pays for itself in less than 5 months within the first year.
It’s also important to note that this type of machinery significantly improves workplace safety:
Q250 v2: https://www.halfreshtech.com/eng/cheese-cutters-q250v2.html
F450PRO: https://www.halfreshtech.com/eng/machines-cutting-vegetables-fruit-f450pro.html
- First-Year Return on Investment (ROI):
- FINAL CONCLUSION
Given all this information and from a financial standpoint, is it worth investing in equipment and occupational safety measures?
For us, the answer is a resounding yes. Financially speaking, any business investment that pays for itself in less than a year is considered “excellent.” And when you consider not only the financial savings but also the peace of mind it brings the company to be able to prevent common workplace hazards such as those mentioned above, the value of this investment can be incalculable.
SOURCES:
https://www.insst.es/documents/d/portal-insst/tema-29-los-costes-de-los-accidentes-de-trabajo
https://es.talent.com/salary?job=cajero
https://www.boe.es/buscar/act.php?id=BOE-A-2015-11724 : Artículo 144.1 de la Ley General de la Seguridad Social (LGSS).
https://www.boe.es/buscar/doc.php?id=BOE-A-2021-9764
Research conducted and written by Keila C.M. at Halfresh.